Hi, I calculated the answer to this question, I know that part of the answer is $400. Could you explain why it is a decrease (answer C)?

This is what I did:

200*(12-10)= $400.

Sandra Company had two hundred units of inventory on hand at the end of the year. These were recorded at a cost of $12 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Sandra Company for each finished product is $15. As a result of recording the adjusting entry as per the lower-of-cost-or-market rule, the gross profit will:

A) increase by $400.

B) increase by $2,000.

C) decrease by $400.

D) decrease by $2,000.